Details of Public Law 117-328, section 101 , Expanding Automatic Enrollment in Retirement Plans

This provision expands automatic enrollment in retirement plans (401(k) or 403(b)). An arrangement or agreement meets the automatic enrollment requirements if such arrangement or agreement is an eligible automatic contribution arrangement and meets the following three requirements:

Allows for permissible withdrawals from an eligible automatic contribution arrangement.

Has a minimum contribution percentage: No less than three percent and no more than 10 percent, That provides an automatic increase in the contribution percentage of 1 percent to at least 10 percent but no more than 15 percent effective for the first day of each plan year after a completed year of participation unless the participant elects no contributions made or at a different percentage, and for certain plans ending before 01/01/2025, initially provides a maximum percentage of 10 percent for an arrangement that does not meet the safe harbor requirements.

Allows automatically contributed amounts to be invested under Department of Labor (DOL) regulations, if the participant makes no investment election.

Automatic enrollment would not apply to certain plans, such as a SIMPLE 401(k) plan, cash or deferred arrangement plan or annuity contracts established before 12/29/2022, government or church plans, any qualified cash or deferred arrangement, or any annuity contract purchased under a plan while the employer maintaining the plan is in existence for less than three years or has less than 10 employees. For multiple employer plans, the automatic enrollment is applied separately to each employer.